We should not rely on centralized privacy providers

[PrivacyOui]

Privacy is a costly good and we really need to consider how to protect our coins by maintaining a good privacy.

As we know from Bitcoin, all address connections are public, possible to track via Blockchain analysis for everyone. Sending a transaction from one of our addresses to another will cause a connection, not limited if it’s our own address or an address from someone else. It is up to us to maintain a good privacy and avoid that our coins to tell too much about us.
Bitcoin is not private but it can be private if we are careful enough to maintain a good privacy.

When trying to maintain a good privacy, we can divide it into 2 major points:

-   Taking steps by ourself to maintain privacy
-   Services to enhance our privacy

I've covered point 1 in my topic "Check twice before sending transaction if it will impact your privacy negatively", so let’s go to point 2 now:


Centralized privacy providers have a single point of failure

We might have heard about it, but centralized services can be seized. Recent examples are several mixers like ChipMixer and Sinbad.io but also privacy enhancing wallets like Samourai Wallet.

As theymos also knows: governments are good at shutting down centralized services if there’s a so called single point of failure, in our case developers which can be arrested and centralized services, which can be seized, online websites, which can be shut down.

And here, we have also to consider to be very careful. Seizing such services will always be a risk to bust our privacy. If privacy services are seized, it'll always be a risk of mixing logs to be leaked and address connections to be revealed.
As it happened to ChipMixer, when several Terabyte of data was collected, among it very likely logs but also private keys (Chips from ChipMixer), where several customers of ChipMixer have reported about coins from such "Chips" being transferred to a different wallet.

We also have to fully trust centralized mixer operators to be honest and to delete logs, which is a big security risk.
Centralized services are somehow against Bitcoin's nature of a decentralized system as we have to trust a middleman, while Bitcoin is fully P2P.


Centralized privacy providers can be honeypots

A honeypot website is a website which is set up and operated to collect certain confidential information on purpose. When people are visiting a honeypot site, various confidential information will be scraped and stored, like your IP address or your entered information but not limited to.

Such data is very valuable for any investigation of crime or business purposes like identifying which wallet belongs to an individual, a company or which interactions an Bitcoin address reveals.
For some cases it might be helpful to catch scammers and hackers but for our privacy, a honeypot website should be avoided, of course.

Honeypots are posing a serious danger to our privacy. We might believe it's quite a normal website and our information is treated confidently, while in reality, any of our data will be stored.
In addition to our IP address etc., entered Bitcoin addresses will be scraped, stored and forwarded to any entity. Addresses will get reviewed and address connections will get revealed.

For privacy enhancing services, we might even pay a fee and not only get nothing in return but also have a privacy risk of believing our Bitcoins are mixed but in reality, logs are kept.

In case of a deliberate honeypot website, deem any privacy assurances as disposable.

I've written more about Honeypot websites here: "Honeypot websites are dangerous for our privacy - BEWARE"



Conclusion: we should not try to maintain our privacy by relying on centralized services as such centralized services are likely to be shut down and such services are full of risks and red flags due to requiring a middle man, when it comes to maintain a good privacy, while Bitcoin is fully P2P.


PrivacyOui

[Nathrixxx]

There is nothing like centralized privacy; we are using a non-custodial wallet or a custodial wallet. This will determine whether we are on the safer side or not. Centralized exchanges do not have any privacy at all. You can only have what you want when you are using a non-custodial, open-source wallet, or you run a full node for your privacy.

[The Cryptovator]

Conclusion: we should not try to maintain our privacy by relying on centralized services as such centralized services are likely to be shut down and such services are full of risks and red flags due to requiring a middle man, when it comes to maintain a good privacy, while Bitcoin is fully P2P.

Although the post is too long, I have read it. I agree with you that we shouldn’t relay on the centralised platform to protect our privacy. Mixers just cut the link and mix everything. But if you don’t use a privacy browser or a paid VPN, then there is still a risk of breaking privacy. Even VPN provider would have your IP as well, keep in mind.

Because if you ever operate a website domain hosting, then you should know how a website collects IP addresses. Although a few mixers or privacy providers promise to delete personal data, who knows the reality? That’s why we have to take care of our privacy ourselves. Unless we protect ourselves, then any third party won’t protect it.

[Ambatman]

There is nothing like centralized privacy; we are using a non-custodial wallet or a custodial wallet. This will determine whether we are on the safer side or not. Centralized exchanges do not have any privacy at all. You can only have what you want when you are using a non-custodial, open-source wallet, or you run a full node for your privacy.

There are centralised service provider for privacy and the OP gave examples if you checked it out.
Non custodial wallets don't guarantee or improve privacy
It Just means a wallet where your keys is proven to be controlled by just you.

But if you don’t use a privacy browser or a paid VPN, then there is still a risk of breaking privacy. Even VPN provider would have your IP as well, keep in mind.

To be honest true privacy on the internet is Almost a myth
The best we can do is reduce the parties involved and data we share.

[Cryptomultiplier]

My understanding is simply and that inorder to maintain Bitcoin privacy, one must learn to use services that honor its P2P nature like using trustless protocols.

Learn to mask IP, use onion routing, use PayJoin and any other collaborative protocols that secures privacy.

[5W-KILO]

Privacy is free but at the same time to really stay private on the internet you need to do the complicating moves, IPs and VPNs and many others needs to be a easy play to you, many people will find this too complex.

I know a friend who wants privacy if possible but he isn't ready to practice and get used to the process of staying anonymous online, and to be fair it's not going to be easy for someone who haven't been doing it for some times already.

I feel like privacy is slowly fading and harder to run, or maybe I should say it's more tasking now too stay true anonymous online, the existence of AI isn't even helping.

[MarryWithBTC]

There is nothing like centralized privacy; we are using a non-custodial wallet or a custodial wallet. This will determine whether we are on the safer side or not. Centralized exchanges do not have any privacy at all. You can only have what you want when you are using a non-custodial, open-source wallet, or you run a full node for your privacy.

We have centralized privacy providers like;

MIXERS and NO AML, NO KYC INSTANT EXCHANGES.

While using them, we should first be sure they don't store our data, and then from our side we should mask our IP or preferably avoid clear net while using the services they provide.

Op, it might be difficult to avoid centralized privacy providers totally unless the person is so technical that they use only decentralized exchanges.

[Hazink]

Privacy is free but at the same time to really stay private on the internet you need to do the complicating moves, IPs and VPNs and many others needs to be a easy play to you, many people will find this too complex.

Privacy is not free, it requires the user to pay the price of discipline and be determined not to expose themselves, The internet we use every day is all about data, even in places we don't imagine collecting our data as we browse VPN use use. You don't know to what end they clear their logs unless you are using open source VPN, no matter how good one is in hidden I just consider it that we can't completely escape being visible online.

[Obiavelliii]

‎I think centralized privacy is a bit of a  contradiction of what Bitcoin stands for,  If a company or a website can be shut down by a government overnight, then it was never a secure option to begin with. Real privacy takes a bit of work, but sticking to P2P tools and running your own node is the only way to actually protect yourself.

[OcTradism]

When trying to maintain a good privacy, we can divide it into 2 major points:

-   Taking steps by ourself to maintain privacy
-   Services to enhance our privacy

Privacy is very important and we have to take care of our privacy by ourselves while if possible, we can use some tools for enhancing privacy. The bottom line is privacy comes from our own practice first, physically and digitally. If we are irresponsible with our practice, offline and online, no privacy tools can protect our privacy.

Erase yourself from Internet.
How to disappear online and become untraceable?
Bitcoin privacy resources.

[mikel_012]

Conclusion: we should not try to maintain our privacy by relying on centralized services as such centralized services are likely to be shut down and such services are full of risks and red flags due to requiring a middle man, when it comes to maintain a good privacy, while Bitcoin is fully P2P.

Ok and we should do what then?

In your entire topic and conclusion, you only said not to use mixers or centralized providers

But if I have 0.5 BTC and I want privacy to send to another person what do I do? Because mixers are a great way to solve this, and yes they can be honeypots or store information, but what other option we have? Do not just attack the solution without giving us the right one

[EarnOnVictor]

This is an important reminder!
Privacy in Bitcoin is not automatic as some think; it requires constant awareness and responsible transaction practices. While centralised privacy services may seem convenient, they introduce their own risks, such as data leaks (popular), seized platforms, hidden surveillance (private and government).

We should not trust a third party with our financial privacy, especially in a decentralised ecosystem like Bitcoin. You Should Be On You Own!

The real goal should be to build and use trustless, decentralised privacy solutions that give users greater control over their funds and transaction history without creating new vulnerabilities of the current.

[boyptc]

Conclusion: we should not try to maintain our privacy by relying on centralized services as such centralized services are likely to be shut down and such services are full of risks and red flags due to requiring a middle man, when it comes to maintain a good privacy, while Bitcoin is fully P2P.

The fact that they are centralized means that there's no privacy on them. Every user will adhere to their rules and everyone will have to obey what they implement.

‎I think centralized privacy is a bit of a  contradiction of what Bitcoin stands for

And there is no such as centralized privacy that favors us individuals. Because if it's about that matter, it's the companies, exchanges, casinos and any of them that has a service related to crypto that shall benefit from it.

If a company or a website can be shut down by a government overnight, then it was never a secure option to begin with.

The compliant companies can be overtaken any day, any time if the government pursues them to for a regulation that they violated.

So as soon as we sign up on any of them, every data that we input on them will be recorded. It's just sad that most of the exchanges and casinos in the past boasted their non kyc policy.

[BitBakerr1]

When trying to maintain a good privacy, we can divide it into 2 major points:

-   Taking steps by ourself to maintain privacy
-   Services to enhance our privacy

If we are irresponsible with our practice, offline and online, no privacy tools can protect our privacy.

You just made it very clear and you are very correct.
We all need to be responsible and keep everything concerning your privacy very private to avoid getting into a very big mess that we wouldn’t be able to solve or fix.
Some people think that there privacy tool should do or will do all the work for them not knowing that they themselves are the most important part when it comes to privacy protection.

[Curious T]

If you use Tor Browser, what other information can a mixer get when you use it aside from your address? Using Tor protects your IP address, so there is no way for the mixer to get your address, so all they have is the address you used to send and the receiving address. As much as that can be used to trace back to you if you have exposed them before, what can the person do with your address? They will see the balance in the address, of course, but is there anything they can do to you?

Mixers just cut the link and mix everything. But if you don’t use a privacy browser or a paid VPN, then there is still a risk of breaking privacy. Even VPN provider would have your IP as well, keep in mind.

If you run your own node and use a VPN to visit the mixer website, can the mixer still get your IP address?

[lovesmayfamilis]

Doesn't our privacy end where we begin to associate ourselves with fiat money? On the Internet, observing all security methods, using a fictional virtual identity, VPN, anti-detection browsers, mixers and other tools for anonymity, it is possible to remain who we want to present ourselves to this virtual world. But as soon as transactions that go beyond the Internet begin, such as cashing out a certain amount or transferring money to your cards, then all confidentiality collapses. How do I address these issues so that our virtual life remains private even offline? I don't see any ways, maybe someone can tell me?